The government is studying to allow mainland individual investors and firms to use the yuan for overseas direct investment in Hong Kong, the South China Morning Post reported.

It will promote the city's status as an offshore center for yuan trade, the newspaper quoted Hong Kong Chief Executive Tsang Yam-Kuen as saying Tuesday.

China will also study the feasibility of using the yuan for trade and financing programs and further promote yuan-denominated bonds in Hong Kong, Tsang said.